Brady Corporation · NYSE:BRC
Brady — Investor Presentation (February 2024)
37 slides from Brady's investor presentation, February 2024
Slide 1: Brady Corporation Investor Presentation
Brady Corporation Investor Presentation December 2023 – February 2024
Slide 2: Forward-Looking Statements
Forward-Looking Statements 2 In this news release, statements that are not reported financial results or other historic information are “forward-looking statements.” These forward-looking statements relate to, among other things, the Company's future financial position, business strategy, targets, p
Slide 3: Brady's Mission & Vision
Brady’s Mission & Vision 3 Brady will: Be the expert in safety, identification, and compliance Possess deep knowledge in niche applications Innovate to provide market-leading, high-performance products, complete solution sets, and systems that solve our customers’ most complex safety and identificat
Slide 4: Summary
Summary 4 Global Leader with Leader in niche safety, identification, and compliance markets. Innovative Solutions Diversified customer base, products, and geographic footprint. Increased organic sales growth rate. Focused on Long-Term Innovation, automation, digital, and geographic expansion. Sustai
Slide 5: Geographic Presence
Geographic Presence 5 Americas & Asia (F’23): Identification Solutions = 91% Workplace Safety = 9% F’23 Sales by Region (72 facilities in 32 countries) Europe & Australia (F’23): 5% 8% Identification Solutions = 53% Workplace Safety = 47% 54% 29% 4% U.S.A. Rest of Americas Asia Europe, Middle East &
Slide 6: Brady's Regional Divisions
Brady’s Regional Divisions 6 Americas & Asia: Safety & Facility ID Wire Identification Overview: • 67% of total revenue. • 60% sold through distribution / 40% sold direct through field sales, internet, telesales and catalog. Primary Brands: • Brady, PDC, Code, Product ID Healthcare ID Magicard, Seto
Slide 7: Brady's Track & Trace Solutions
Brady’s Track & Trace Solutions 7 RFID Readers Mobile Nordic ID and Code Benchtop Barcode Readers Label Automation Expertise Core Brady Portfolio
Slide 8: Social Value is Embedded in our Strategy
Social Value is Embedded in our Strategy 8 Delivering on our ESG Commitments Drives Long-term Shareholder Value Environmental Social Governance Committed to making a Supporting our communities, Committed to performance, material positive impact on employee engagement, accountability, and the highest
Slide 9: Social Value and ESG Highlights
Social Value and ESG Highlights 9 We are Making Significant Progress across all Areas Green Enhance Our Board Products Communities Committees Water Dissolvable labels designed for use in the Enhance Our Communities 84 60% laboratory setting, which allow Community organizations Percent of board commi
Slide 10: Summary
Summary 10 Accelerated Organic Sales Growth: • Innovation, automation, digital and geographic expansion. • Organic sales growth of 5.5% for the year ended July 31, 2023. Shifting our Portfolio into Faster-Growing End Markets: • Code and Nordic ID fill gaps in our industrial track-and-trace product o
Slide 11: Financial Overview
—— Financial Overview
Slide 12: Revenues Annual Trends
Revenues 12 Annual Trends (Millions of USD) $1,332 $1,302 $1,300 $1,200 $1,174 $1,161 $1,145 $1,121 $1,113 $1,100 $1,081 $1,000 $900 F'16 F'17 F'18 F'19 F'20 F'21 F'22 F'23 Organic Growth (0.7%) 0.5% 2.6% 2.8% (5.4%) 1.6% 9.4% 5.5% For. Currency (3.7%) (1.2%) 3.0% (2.6%) (1.4%) 3.2% (2.6%) (3.0%) Ac
Slide 13: Gross Profit Margins Annual Trends
Gross Profit Margins 13 Annual Trends (Millions of USD) 49.9% 50.1% 50.1% 49.9% 48.9% 49.0% 49.4% 48.5% $700 50% $657 $632 40% $600 $588 $579 $559 $558 $561 30% $529 20% $500 10% $400 0% F'16 F'17 F'18 F'19 F'20 F'21 F'22 F'23 Gross Profit Margin: Focus on sustainable operational improvements and au
Slide 14: Research & Development Annual Trends
Research & Development 14 Annual Trends (Millions of USD) 5.0% $70 4.6% 4.5% $61 $60 3.9% 3.9% 3.9% $59 3.8% 4.0% 3.6% 3.2% $50 $45 $45 $45 3.0% $40 $41 $40 $36 2.0% $30 $20 1.0% F'16 F'17 F'18 F'19 F'20 F'21 F'22 F'23 R&D Expense: Investing in R&D to drive future organic sales growth. Increased the
Slide 15: SG&A Expenses Annual Trends
SG&A Expenses 15 Annual Trends (Millions of USD) $450 36.1% 34.8% 35% 33.3% 32.0% 31.1% $405 30.6% 29.2% 30% $400 $390 27.8% $388 $380 $371 $371 25% $350 $350 $336 20% $300 15% F'16 F'17 F'18 F'19 F'20 F'21 F'22 F'23 SG&A Expense: Demonstrated ability to reduce SG&A as a percent of sales. Simplified
Slide 16: Income Before Income Taxes Annual Trends
Income Before Income Taxes 16 Annual Trends (Millions of USD) $226 $225 $200 $192 $171 $175 $165 $152 $150 $141 $127 $125 $109 $100 $75 F'16 F'17 F'18 F'19 F'20 F'21 F'22 F'23 Yr on Yr Growth 19.1% 15.8% 20.0% 8.3% (14.4%) 21.3% 12.3% 17.6% (Decline) Income Before Income Taxes: History of strong yea
Slide 17: Diluted EPS Annual Trends
Diluted EPS 17 Annual Trends (Millions of USD) $3.51 $3.50 $3.00 $2.90 $2.46 $2.47 $2.50 $2.11 $2.04 $2.00 $1.84 $1.58 $1.50 $1.00 F'16 F'17 F'18 * F'19 F'20 F'21 F'22 F'23 Yr on Yr Growth 24.4% 16.5% 10.9% 20.6% (14.2%) 17.1% 17.4% 21.0% (Decline) Diluted EPS: History of strong year-over-year EPS g
Slide 18: Cash Generation
Cash Generation 18 Cash from Op. Activities – Annual Trends (Millions of USD) $206 $209 $200 $162 $150 $144 $143 $141 $139 $118 $100 $50 F'16 F'17 F'18 F'19 F'20 F'21 F'22 F'23 Cash Generation: History of strong cash generation. F’22 cash generation was negatively impacted by an intentional $62.9M i
Slide 19: Net Cash: Strong Balance Sheet
Net Cash (millions of USD) 19 $400 $322 $300 $200 $123 $109 $102 $91 $84 $100 $64 $26 $31 $19 $15 $- Q3 F'21 Q4 F'21 Q1 F'22 Q2 F'22 Q3 F'22 Q4 F'22 Q1 F'23 Q2 F'23 Q3 F'23 Q4 F'23 Q1 F'24 Strong Balance Sheet: October 31, 2023 cash = $175.4M and debt = $52.3M. Brady is in a net cash position, even
Slide 20: Americas & Asia: F'23 vs. F'22
Americas & Asia 20 F’23 vs. F’22 (millions of USD) SALES & SEGMENT PROFIT % (millions of USD) F’23 F’22 Change $1,100 20% Sales $1,000 20% $ 888.9 $ 861.1 + 3.2% 19% $889 $900 $861 Segment Profit 180.5 157.3 + 14.7% $800 $736 18% 18% Segment Profit % $700 20.3% 18.3% + 200 bps $600 16% $500 $400 14%
Slide 21: Europe & Australia: F'23 vs. F'22
Europe & Australia 21 F’23 vs. F’22 (millions of USD) SALES & SEGMENT PROFIT % (millions of USD) F’23 F’22 Change $441 $443 16% $450 $409 Sales $ 443.0 $ 441.0 0.5% $400 15% 14% $350 Segment Profit 65.7 63.1 + 4.3% 14% 14% $300 Segment Profit % 14.8% 14.3% + 50 bps $250 $200 $150 12% $100 SALES & SE
Slide 22: Summary: We are financially strong
Summary 22 We are financially strong. Accelerated organic sales growth. Improved profitability. Returning funds to our shareholders. Strong new product line-up, positive sales momentum, on-going growth investments, a strong balance sheet, and a focus on execution puts Brady in an excellent position
Slide 23: Appendix: Q1 F'24 Financial Review
Appendix Q1 F’24 Financial Review
Slide 24: Q1 F'24 Highlights
Q1 F’24 Highlights 24 Organic Sales Growth Organic sales grew 2.7%, with organic growth in both regions. GPM of 51.7% compared to 48.1% in Q1 of F’23. Improved GPM Healthy gross profit margins demonstrate our high value-add. GAAP EPS of $0.97 was up 22.8% over Q1 of last year. Expanding Earnings Dil
Slide 25: Sales Overview
Sales Overview 25 SALES (millions of USD) $350 $346 $339 $337 $332 $324 $326 $321 $323 $325 $318 $306 $300 $296 $287 $277 $277 $275 $266 $266 $252 $250 $225 Q1 F'20 Q2 F'20 Q3 F'20 Q4 F'20 Q1 F'21 Q2 F'21 Q3 F'21 Q4 F'21 Q1 F'22 Q2 F'22 Q3 F'22 Q4 F'22 Q1 F'23 Q2 F'23 Q3 F'23 Q4 F'23 Q1 F'24 Organic
Slide 26: Gross Profit Margin
Gross Profit Margin 26 GROSS PROFIT & GPM% (millions of USD) 51.7% 52% 50.8% 50.3% 50.4% 50.4% 50.3% 49.3% $176 50% 48.7% 48.9% 48.7% $172 $175 48.2% 48.2% 48.4% 48.1% 48.0% $170 47.1% 47.0% $164 $163 48% $155 $155 $156 $149 $148 $149 46% $150 $141 $139 $135 44% $130 $130 $125 42% $119 40% $100 38%
Slide 27: SG&A Expense
SG&A Expense 27 SG&A EXPENSE AND SG&A EXPENSE AS A % OF SALES (millions of USD) $120 35% 31.2% 31.6% 31.3% 30.2% 30.9% 30.7% 30.0% 30.6% 30.1% $110 29.1% 29.2% 29.0% 28.4% 27.9% 28.3% 28.2% 30% 27.0% $100 $97 $96 $97 $96 $94 $95 25% $93 $92 $90 $91 $90 $91 $90 $87 $83 $83 $82 20% $80 $76 15% $70 $60
Slide 28: R&D Expense
R&D Expense 28 R&D EXPENSE AND R&D EXPENSE AS A % OF SALES (millions of USD) 4.9% 4.7% 4.7% 4.7% $18.0 4.7% 4.4% 4.3% 4.3% 4.3% 4.4% $16.3 4.5% $15.8 $15.7 $15.7 $16.0 $15.4 3.8% 3.8% $14.9 3.8% 3.7% 3.7% 3.7% 3.7% $14.0 $13.9 $13.9 $14.0 $13.2 3.5% $12.0 $11.3 $11.0 $10.5 $10.2 $9.8 $9.9 $10.0 $9.4
Slide 29: Income Before Income Taxes
Income Before Income Taxes 29 INCOME BEFORE INCOME TAXES (GAAP) (millions of USD) $70 $63.0 $63.8 $59.4 $60 $54.0 $51.3 $50.3 $47.8 $48.5 $50 $44.7 $41.6 $42.4 $42.2 $41.6 $42.0 $39.4 $40 $34.9 $30 $22.2 $20 $10 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Year-on-Year F'20 F'20 F'20 F'20 F'21
Slide 30: Net Income & Diluted EPS
Net Income & Diluted EPS 30 NET INCOME (GAAP) (millions of USD) DILUTED EPS (GAAP) $49.4 $1.00 $50 $48.1 $47.2 $1.00 $0.96 $0.97 $0.81 $0.79 $41.1 $0.78 $40.1 $39.4 $0.80 $0.76 $40 $37.3 $38.0 $0.71 $0.67 $0.65 $0.64 $35.0 $0.59 $33.5 $33.8 $0.60 $0.53 $30.9 $30 $28.0 $0.40 $20 $0.20 Q1 Q2 Q3 Q4 Q1
Slide 31: Cash Generation
Cash Generation 31 CASH FLOW FROM OPERATING ACTIVITIES (millions of USD) $79.3 $75 $72.5 $62.8 $62.3 $56.0 $50.8 $53.2 CASH FLOWS IN Q1 OF F’24: $55 $42.8 $45.1 $40.9 $38.8 Overview: $36.1 $35 $27.5 $28.0 $29.4 Cash flow from operating activities was up 122.4% $14.3 in Q1 of F’24; increasing from $2
Slide 32: Net Cash
Net Cash 32 NET CASH (millions of USD) $322 $300 $278 $256 $245 $240 $250 $218 $200 $190 $150 $123 $109 $102 $100 $91 $84 $64 $50 $26 $31 $19 $15 $0 Q1 F'20 Q2 F'20 Q3 F'20 Q4 F'20 Q1 F'21 Q2 F'21 Q3 F'21 Q4 F'21 Q1 F'22 Q2 F'22 Q3 F'22 Q4 F'22 Q1 F'23 Q2 F'23 Q3 F'23 Q4 F'23 Q1 F'24 STRONG BALANCE
Slide 33: Americas & Asia
Americas & Asia 33 Q1 F’24 vs. Q1 F’23 (millions of USD) Q1 F’24 SUMMARY: • Revenues increased 1.4% in Q1 of F’24: Q1 F’24 Q1 F’23 Change • Organic growth = + 3.3%. Sales $ 221.6 $ 218.5 + 1.4% • Divestiture = (1.9%). • Organic sales grew 4.4% in the Americas, driven by Segment Profit 49.9 41.1 + 21
Slide 34: Europe & Australia
Europe & Australia 34 Q1 F’24 vs. Q1 F’23 (millions of USD) Q1 F’24 SUMMARY: • Revenues increased 6.0% in Q1 of F’24: Q1 F’24 Q1 F’23 Change • Organic growth = + 1.4%. Sales $ 110.4 $ 104.1 + 6.0% • Fx increase = + 4.6%. • Organic sales grew 0.8% in Europe driven by growth Segment Profit 16.7 16.8 (
Slide 35: Appendix: GAAP to Non-GAAP Reconciliations
Appendix GAAP to Non-GAAP Reconciliations
Slide 36: Non-GAAP Reconciliations
Non-GAAP Reconciliations 36 GAAP to NON-GAAP MEASURES (Unaudited; Dollars in Thousands, Except Per Share Amounts) In accordance with the U.S. Securities and Exchange Commission’s Regulation G, the following provides definitions of the non-GAAP measures used in the earnings release and the reconcilia
Slide 37: Non-GAAP Reconciliations
Non-GAAP Reconciliations 37 GAAP to NON-GAAP MEASURES (Unaudited; Dollars in Thousands, Except Per Share Amounts) Net Income Excluding Certain Items: Brady is presenting the non-GAAP measure, "Net Income Excluding Certain Items." This is not a calculation based upon GAAP. The amounts included in thi